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GM Calculates Disturbingly Cold Substitute for Losses

By: Chris Dixon • July 7, 2014

Kenneth Feinberg Reveals How GM Pays for Limbs and Lives Lost in Over 2.6 Million Defective GM Vehicles

Kenneth Feinberg was hired by GM to administer a victim’s compensation fund to resolve liability claims. GM will compensate drivers who were injured or died in its defective vehicles as well as their passengers, those who were riding in other vehicles who were struck by one of the affected GM cars and pedestrians.

Kenneth Feinberg will accept claims from August 1 to December 31 and said this program is not to punish GM, but about compensating victims. Feinberg said that people who want to take legal action against the car maker should not submit a claim. In other words, those who make use of the program must waive their right to sue General Motors.

Kenneth Feinberg is well-known for handling high-profile cases such as the Boston Marathon bombings, 9/11 attacks, Virginia Tech shootings and the Deepwater Horizon Oil spill. He now applies his unique expertise to handle claims for the GM victims. GM stated that Feinberg would treat all claims in a fair and expeditious manner.

It is expected that most claims will settle within ninety days and where there are special circumstances, claims would be paid within approximately four months. Feinberg said the only real test for a program like this is how soon you can get the money out of the door. He also said that words were meaningless if the money does not flow, and that is the way it is.

The Math Behind Feinberg’s Cold Approach

GM now offers compensation, depending on whether the victim was medically treated, suffered severe catastrophic injuries or died. Feinberg said money is a poor substitute for loss while giving examples of what GM would be willing to pay victims. A forty-year-old paraplegic with a spouse can receive up to $6.6 million, a ten-year-old quadriplegic $7.8 million and a seventeen-year-old student who died $2.2 million. Feinberg said paying money is all they can do; they cannot restore limbs or bring people back.

The cold approach of Feinberg is based on almost the same program that was used to allocate pay outs from the 9/11 Victims Fund. The reimbursement for pain and suffering for September 11th victims were $250,000. Only at the insistence of the plaintiffs’ lawyers and automotive safety advocates GM agreed to pay $1 million for non-economic losses.

Those who lost their loved ones would be compensated the same as those who suffered permanent brain damage, pervasive burns or double amputation. Victims of the GM negligence, who required medical attention and suffered fewer severe injuries, would receive a minimum amount of $20,000, but not more than $500,000 for non-economic losses.

The auto maker admitted that it took more than ten years to recall the cars with defective ignitions that caused airbags not to deploy in accidents. Feinberg said the fact that so many of the accidents occurred long ago is a problem. The biggest challenge now is to figure out who is entitled to claim and receive compensation with most of the evidence gone.

Camille Biros, the deputy administrator of the fund, says they will rely on the car’s electronic data recorder, witness reports, maintenance records and hospital and police reports. The deputy administrator is confident that they will be able to determine the reason of the accident. All eligible claims will be paid, regardless of whether the accident happened before or after the General Motors’s bankruptcy filing in June 2009. GM’s compensation amount depends almost entirely on whether the person died, suffered serious injury or was treated and released from the hospital. The economic program is simple, yet very cold.

GM Profits Fell Due to Faulty Ignition Switches

CNNMoney reported on April 24, 2014, that GM profits fell to $108 million in the first quarter, and shares were down 16% for the year. The NHTSA fined the car maker in May 2014 for failing to recall the defective cars. The regulator could not impose more than the maximum amount of $35 million. However, Congress is considering increasing the amount to $300 million.

The cost of the 2014 recall due to defective ignition switches accumulated to almost $1.3 billion. The recall is linked to thirteen deaths, and it is possible that the death toll can be higher. General Motors reports that they are facing around 80 lawsuits from GM victims asking for as much as $10 billion for economic losses. Feinberg is expected to issue a report soon on how GM should compensate those killed or injured.

St. Louis personal injury attorney Christopher Dixon handles cases all over Missouri and Illinois, including but not limited to the following areas: city of St. Louis, St. Louis County, Jefferson County, Lincoln County, St. Charles County, and Franklin County, in municipalities including Clayton, Maplewood, Richmond Heights, University City, Shrewsbury, Arnold, Des Peres, Chesterfield, Kirkwood, O’Fallon, St. Charles, St. Peters, Overland, Creve Coeur, Jennings, Manchester, Ballwin, Maryland Heights, Brentwood, Bridgeton, Glendale, Wildwood, Warson Woods, Town & Country, and Warrenton.

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